Firstly, what is workers' compensation insurance? It's sometimes shortened to workers' comp, but it basically covers employees that are injured on the job. If someone in your business hurts themselves, your insurance kicks in to provide them with compensation that covers any lost wages or medical bills. So, should your business have this insurance? Today, we'll have a look at workers' comp in a bit more detail, giving you some reasons why it's worth having.
By Team Savant
Image: Annie Spratt
The legalities surrounding it are quite murky as it isn't technically a legal requirement for every business. In some states it is, but it will depend on where your business is based, along with the industry you're in. Still, this is definitely something you should consider, particularly if you work in risky industries.
How Much Does Workers' Compensation Cost?
Honestly, it varies from business to business. Companies in very risky sectors will have higher premiums than ones that are in 'safer' environments. Let's say you have a construction business and you regularly use air powered mixers to mix flammable materials, and large machines to move materials around a site. Here, the chances of injuries happening are very high, so you'll have to pay a lot for workers' compensation insurance. By contrast, if you work in an office, your premium will be considerably cheaper.
The more chances there are of accidents happening, the more expensive workers' comp will be. This is simply because insurance providers don't want to have to keep paying out on multiple claims all the time! In their mind, if they have to keep paying out, they'll ensure you pay a hefty price for their insurance services.
How Can You Reduce the Cost of Workers' Compensation?
It is possible to reduce the cost of your premium by making your business as safe as possible. Having clear health & safety plans and measures in place will do this. When the insurance provider assesses your company, they'll take this into account as you've clearly done all you can to minimize risks. A good history when it comes to accidents will also play in your favour.
Why Should You Get Workers' Compensation Insurance?
Regardless of whether it's a legal requirement or not, every business should try to get this insurance. Why? Because it yields the following benefits for your company:
Financial protection for your business by avoiding any lawsuits with injured or sick employees
Improve your business reputation by showing you care for your employee's wellbeing
Make your business more attractive to prospective employees, making it easier to hire new people
Keep your employees happy as they feel protected, leading to higher retention rates
In essence, you can avoid losing a lot of money if accidents happen on your business premises. Not only that, but you can improve your relationship with employees by providing them with this helpful benefit.
In conclusion, workers' compensation insurance should be something that every business owner looks into. Even if your business operates in a safe setting, it can provide you with some big benefits.